When you try to define Taoism, you immediately run into trouble. The great Taoist philosopher and author of the Tao Te Ching, Lao Tzu, begins his first chapter with the warning words,
The Tao that can be described is not the eternal Tao.
The name that can be named is not the eternal name.
Thus Westerners are not the only ones who have a hard time defining Taoism; the Chinese have had difficulty time agreeing on just what Taoism is for millenia. Taoism is sometimes defined as a ritualistic religion, as a philosophy, as Chinese folk religion, as alchemy, as a system of magical lore, or as a series of health practices similar to yoga. The adherants of each school often look with disdain on the others as being heterodoxy, heresy, or simply incomplete portions of the great Tao.
The Chinese word Tao (pronounced "dow") means "the way, the path." In the common sense it refers to the way of doing anything, or the pathway to some destination. In its higher meaning, Tao refers to the way of the universe, the way things are. As a spiritual system, Tao means the way to achieving a true understanding of the nature of mind and reality, to the way of living in harmony with the changes of Nature. Thus the Tao is the goal, the path and the journey all in one.